For Questions Refer to the Following Information:
a $$P = 24 - 0.0004 Q _ { d }$$

question 49

Multiple Choice

For Questions refer to the following information:
A municipal water utility employs quasi-fixed capital inputs-are the water treatment plant and distribution lines to homes-to supply water to 20,000 households in the community it serves. The figure below shows the cost structure of this utility for various levels of water service. Quantity of water consumption is measured in 1,000-gallon units per month. AQFC is the average quasi-fixed cost curve, and LAC is long-run average cost. Long-run marginal cost, LMC, is constant and equal to $4 per 1,000-gallon unit. The inverse demand equation is $$P = 24 - 0.0004 Q _ { d }$$ .
-The value in blank a in the figure is ____.

• A) 40,000
• B) 45,000
• C) 50,000
• D) 55,000
• E) none of the above

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Definitions:

Actuary

A professional who assesses and manages the risks of financial investments, insurance policies, and other potentially risky ventures using mathematics, statistics, and financial theory.

Pension Payments

Regular payments made to retirees or their beneficiaries from a pension fund.

Actuarial Assumed Rate

The interest rate that an actuary determines to calculate the present value of future pension benefits or contributions.

Risk Averse

A description of an investor's preference for lower risk investments, often characterized by a willingness to accept lower returns in exchange for reduced risk.